Characterizing Service Components of China's Manufacturing Exports

Based on the World Input-Output Database, we decompose China's manufacturing exports into domestic content and foreign content using the framework proposed by Wang et al. (2013) to calculate and analyze the service components of manufacturing exports. The share of services in China's gross manufacturing exports presented a U-shape trend from 2000 to 2009, and decreased after 2009. Comparison with Japan and the United States in the same period reveals that this pattern is distinctive to China. The empirical study finds that labor cost in production and investment structure are two important factors that influence the service components of China's manufacturing exports.